Kuala lumpur: The Ministry of Investment, Trade and Industry (MITI) will continue to engage with the United States over the 10 per cent forced labour-related tariff imposed on Malaysian exports effective today. MITI stated that the tariff, which began at 12.01 am US time on July 24, follows the expiry of the temporary tariff under Section 122 Trade Act 1974. The US is 12 hours behind Malaysia.

According to BERNAMA News Agency, Malaysia is one of 17 economies subject to this new 10 per cent tariff, stemming from the US Section 301 investigation related to forced labour. The remaining economies involved in this probe are facing a higher tariff rate of 12.5 per cent. The investigation, however, concerning excess capacity on 16 economies, including Malaysia, is still ongoing.

MITI noted that the United States Trade Representative (USTR) based the tariff rate on Malaysia's commitments to enforce laws prohibiting the importation of forced labour goods. The ministry will keep stakeholders informed as developments occur in the USTR's assessment related to the excess capacity investigation.

USTR Ambassador Jamieson Greer mentioned earlier today that Malaysia, along with Cambodia and Indonesia, are among ASEAN countries facing the 10 per cent duties due to insufficient enforcement of forced labour import regulations.

Moody's Analytics explained that the new US tariff structure comprises three tiers based on the Section 301 investigation outcomes. Economies with a forced labour import ban that is not fully enforced or operate a partial enforcement regime, such as Malaysia, Indonesia, and others, fall under the 10 per cent tariff category.

The report also highlighted that economies with trade agreements with the US are subject to tariffs of either 10 per cent or 12.5 per cent, including the European Union (10 per cent), Taiwan (10 per cent), South Korea (12.5 per cent), and Japan (12.5 per cent). Meanwhile, economies like China, Singapore, and Australia, part of the broader group of 60 under the Section 301 investigation, face a 12.5 per cent tariff.